The yuan advances in the local economy: should you open an account in the Chinese currency?

Yuan accounts: the benefits

In principle, it is necessary to highlight the close link that Argentina maintains with China in relation to the debt and the financing capacity that China provides to Argentina at a complex moment for the economy. This path towards the incorporation of the yuan into the Argentine economy accelerated after Sergio Massa’s trip to China, in which the “swap” agreement with that country was extended to an equivalent of US$10,000 million. In fact, the maturity of US$2.7 billion was paid not only with SDRs but also with yuan, something that the Ministry of Economy itself described as “new”.

They officially reported that the measure announced by the Central Bank last week seeks to provide options to investors to operate with different financial instruments in Chinese currency and jointly.

the economist Natalia Motyl In dialogue with Ámbito, he affirmed that “among the pros is the last provision that bonds in dollars can be traded with yuan and give guarantees in yuan in the futures market. Given the lack of dollars, it is an option, especially those who are dedicated to trading Also those who trade can access the yuan for imports or dump them in the financial market after export. Today it is destined for commerce.”

Also, having a bank account will serve, in addition to being able to acquire the Chinese currency as savings, to operate assets subject to that currency. If an investor wants to buy bonds through an Alyc, the funds have to come out of a bank account and when selling them they must deposit the money obtained in an account. Thus, an operation similar to the one carried out to acquire the MEP dollar can be carried out, but in this case in yuan.

However, Motyl states that “it is not recommended for every agent”.

Yuan accounts: the factors against

for the economist Frederick Glustein, “It should be noted that there is still no internal volume of operations, nor financial instruments linked to the Chinese currency. The CNV activated the settlement of renminbi bonds in order to motorize a nascent futures market in that currency, but still it is incipient. At Rofex there are RMB yuan futures trading for about RMB 900 million but it is minimal compared to dollars.”

In the external sector, 20% of imports (2.7 billion dollars) in the last two months were made in yuan, of which our country has 110 billion yuan in its coffers through the latest swap expansion. . Since its authorization to operate in the MAE in October 2020, until June of this year, operations were carried out for around 2,400 million yuan.

But, as Glustein points out, it may be a good option for 2024: “It is not yet enabled for individuals to operate in Chinese currency in terms of saving or hoarding, but The Argentine importing sector should look more favorably on this measure by 2024, taking into account that dollars will continue to be lacking and with unabated demand, it is a good way to deal with payments.”